Volkswagen Optimizes Custom Car Production in Spain

Madrid — June 3, 2004 — Volkswagen Group of Spain has engaged Spanish system integrator Gedas Iberia to deploy optimization software from ILOG in order to offer customers more customized products and optimize production planning.

Faster time-to-market requirements and demand for custom products are creating more complex challenges for car manufacturers. For VW, these challenges drove the need for a more flexible planning system that would allow the automaker and its Spanish subsidiary, Seat, to both fulfill the rising demand for customizable cars and boost sales.

Gedas Iberia implemented new car sequencing and production planning systems in two plants of the VW Group, the SEAT Martorell and the Volkswagen Navarra locations, which produce 2,000 and 1,200 cars per day, respectively.

Prior to implementing the ILOG-Gedas solution, planning was a manual, labor-intensive process based on an inflexible, custom-built solution. The introduction of ILOG optimization into the planning system enabled VW to leverage its existing host client server and Oracle server environment, extending the value of its legacy applications.

ILOG said that its CPLEX optimization software has reduced the time it takes to build a schedule from an hour and-a-half to 15 minutes. Overall, only a half-day is now required to generate a production plan for the next day when a full day was necessary prior to using CPLEX.

Using the new Gedas-ILOG solution, VW can optimize assembly line resources to better meet customer and dealer specifications, and eliminate costly excess inventory because, through better planning, the plants only stock the parts needed based on current orders, according to ILOG.

In the Volkswagen Navarra facility, in addition to using CPLEX for planning, Volkswagen relies on ILOG's Solver for car sequencing, helping to reduce the time needed to create a sequence from six hours when it was done manually to a couple of minutes currently.

Time gains related to re-sequencing complement the agility and flexibility acquired through the new planning system. ILOG said its real time optimization solution enables the car maker to meet both planning and sequencing specific time constraints and needs.

The new production planning system also enables the car maker to respond very swiftly to incidents, events and changing needs and to create new plans in real time, helping to ensure that any unexpected event — such as car engine delivery delays due to transporter's strikes, production machine breakdown — will have a minimal impact on the production. The car maker is able to re-plan rapidly, taking into account the new constraints, ensuring the highest operational efficiency and maximizing resource utilization, according to the solution provider.

The Martorell car production site of SEAT is one of the most advanced facilities in Europe due to its logistics system as well as its production process' flexibility. Currently, six different car models are being produced on its assembly lines.

For an in-depth look at automaker Nissan's initiative to optimize production at its plant in Sunderland, England, using a solution from ILOG, see the SDCExec.com article Scheduled for Success.